gesturing and smiling, she was raising eyebrows, including her own. jean me moose, cnn. >> now she's sophia loren. >> reporter: new york. >> i'm candy crowley in "the situation room." for our international viewers, world report is next. in north america, john king usa starts right now. >> good evening. cautious optimism from president obama. republicans are ready to set aside years of bitter differences and strike a deal to slash trillions from the government's red ink. >> everybody acknowledged that there's going to be pain involved and our biggest obligation is to make sure that we're doing the right thing by the american people. >> in a moment, what a deal could mean to your mortgage deduction or your medicare costs. but, first, the crime and punishment drama that has captured the neags's attention. casey anthony was back in court today. the judge threw the book at her, yet she will be a free woman out

and about on the streets next wednesday. a remarkable event for the 25-year-old woman who days ago faced the death penalty if convicted of murdering her 2-year-old daughter caylee anthony back in 2008. but, remember, she was found not guilty of first-degree murder, not guilty of abusing her or manslaughter. her sentencing was for four misdemeanor counts of lying to the police about her disappearance. judge melvin perry said he had good reason to impose maximum sentence for each count. >> as a result of those four separate and distinct lies, law enforcement expended a great deal of time, energy, and manpower looking for young caylee marie anthony.

the search for her went on from july through december over several months trying to find caylee marie anthony. four distinct, separate lies. >> the judge making his disdain clear there. but the maximum sentence is four years total. casey anthony gets credit, though, for the time that she was held without bail. and when you add it all up, the bottom line is, casey anthony will be free, released from prison next wednesday. so let's get some reaction from the stunning turn of events from someone who makes no secret she believes casey anthony is guilty. nancy grace, she will be on the streets in a matter of days.

you call her tot mom. you say she's guilty. what did you think of the sentencing today? >> well, frankly, i was stunned. i was stunned the way the entire thing has unfolded. and i think that most of the public agrees with me. but the reality is, it's over. the jury has spoken. there are no do-overs in our justice system. so we have to accept what has happened and move on. i know that i will pick up the next file for the next missing child, the next unsolved homicide and continue forward but this will forever remain a travesty of injustice. >> if somehow you could convince her to come on to your program, what would you say to her? >> well, i don't really need to know anything about the facts. i think the facts have been adequately proven by the state. but i would like to know why. but frankly the only thing that tot mom has ever told the truth about was caylee's d.o.b., her date of birth.

everything she's said since then has really been a lie. i really don't know what good it would be to speak to her. >> we talked to you moments before the verdict -- >> and, plus, john king, i don't think i could afford what she would charge for a sit down interview any way. apparently her lawyer's already got a talent agent, jose baez i'm sure she will soon follow. so i guess some things you just can't put a price tag on, john. >> we'll watch how that plays. we talked moments before the verdict, you were convinced it was going to go the other way. i want to remind our viewers, you were adamant when i asked you this question. >> did the defense do a good enough job, sure, you think she might have done it but you have to come back and say not guilty if there is reasonable doubt. >> john king, there you go. you don't have to know she did it the way you said. the case must prove the case beyond a reasonable doubt. that is not a doubt founded in

fancy such as little green men could have come down and did it. that could have happened. but did it happen? what is a reasonable hypothesis as to what happened? >> you've heard from several of the jurors why they had that reasonable doubt. do you accept that explanation? i saw one interview where you said that they are coo-cookie. >> they also said that they are sick to their stomachs because she not innocent. i don't know how you can reconcile that. i think they aring a severe case of buyer's remorse. they made a bad decision and they feel bad about t i would. >> you mentioned jose baez. he was one of the lead defense attorneys. i want to you listen to his characterization of his client in this interview with barbara walters. >> describe casey anthony. you know her now better than anyone else. >> i think casey is an extremely

intelligent, kind, warm-hearted individual. >> do you think casey was a good mother? >> yes, i do. >> what do you make of that? >> i think that he is still defending his client. i think that they have become extremely friendly over the course of the investigation and the trial. and i think that he will always defend her. his reputation is tied into defending her. so that's what i would expect him to say. i'm not surprised at all. >> you say much of the public agrees with you. i think that's probably a fair statement. we've seen a lot of great outrage about this verdict. however, you're a former prosecutor, you're an attorney, you're an officer of the court. i want you to listen to some of the things that you've said about this verdict and then we'll have a question on the other side. >> not guilty. the devil is dancing tonight. i'm not going to let some jury stop justice. a stunning blow to justice.

it's not the first time somebody guilty has walked free. tot mom is guilty. >> again, as an attorney, you agree you're part of a system where it's innocent until proven guilty. do you have any remorse for saying this, any sense that you owe casey anthony an apology? >> john, can i ask you, why would you ask me that? that is just so nonsense cal. because clearly i think the evidence showed that tot mom, casey anthony was guilty. and to suggest that somehow because i am a former prosecutor, because i am a former crime -- i am a crime victim myself, because i have a tv show now, that somehow that s sus spent my freedom of speech and frankly my commonsense? that question does not make sense. tot mom, in my mind, has been proven guilty. and as far as any apologies, i think it should be her apology,

apologizing to the public for spending about a million dollars of their money looking for a child that she says they already know is dead. the sheriff's department is asking to pay a million dollars bill and he can kwi search he c search is piling on more that that. bounty patrol, atvs looked for caylee. the whole time she's sitting there twid delling her thumbs on facebook. >> i would never question your right to freedom of speech. that's why we're here. but as you know, you've become a lit bit of a lightning rod. one of the jurors said i have reasonable doubt. he asked her what she thought of nancy grace. >> i have no comment on nancy grace. it's not fit for television. >> so you do have thoughts, you're just not going to say them? >> they are negative and it's

just -- there's no point in it. i think a lot of things she says just fuels the fire and they are based on nothing and i'm obviously against making decisions based on just speculation and opinions. >> what do you make of this? as you know, you've caught some har poons in the last 24, 48 hours. >> well, how many clips, critics against me are you going to show and how does that advance the story that caylee was murdered and found wrothing in a swampy field. but whatever? what do i think about the juror disliking me or what do i have to say? i didn't enter into this to win a popularity contest, john. i don't think i'm going to go home crown miss speet potato. when you take a stand and expect criticism, you can expect being

skofed at, ridiculed, being made fun of. but i recall back in 1979 when my fiancee was murdered that changed my life. forever. from that point on it has been my mission to represent crime victims and to do my duty to seek justice. and just because some juror that rendered a bad verdict doesn't like me or some defense attorney makes fun of me or talks about me or some talking head talks about me, i don't care. that's not changing anything. because i know what is true and what is real. so you can play all the clips you want to and it won't change a thing. >> controversial and unapologetic. nancy grace, thank you for your time tonight. >> thanks, john. still ahead, the lead prosecutor in the anthony trial also says he thinks casey is guilty. but is he opened to changing his mind?

>> it's like the boy who cried wolf. there's really no version that miss anthony could give. and, next, high stakes negotiations at the white house about letting the government borrow more money but the outcome, make no doubt about it, will affect your bottom line, too. . its powerful tools help you work faster and smarter so you can get back to playing "angry birds." it lets you access business forms on the go, fire off e-mails with the qwerty keypad, and work securely around the world so you can get back to playing "angry birds." it's the android-powered phone that mixes business with pleasure. so let's get our work done, america, so we can all get back to playing "angry birds." the motorola expert from sprint. trouble hearing on the phone? visit sprintrelay.com. you can do this... get the ball, girl. hmmm, you can't do that. but you can do this. bengay pain relief + massage with penetrating nubs plus the powerful pain relief of bengay. love the nubs!

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can democrats and republicans work together over the next 26 days and resolve differences that have divided them from the past decade. things like major spending cuts, tax increases and risky changes to medicare and social security? it's part of a complicated and very consequential negotiation. in english, to allow the government to back to the white house. >> i will reconvene and at that point the parties will at least know where each other's bottom lines are and hopefully will be in a position to then start engaging in the hard bargaining that is necessary to get a deal done. >> chief white house correspondent jessica yellin is

live with the details. the president is talking and they are hoping for a big grand bargain. what is your sense? >> reporter: well, they have to get one done. so it's sort of the opposite of a cliff hanger. we know how it will end. the question is how do they get there from here? the big question first of all that i can report is that the president told congressional leaders that under no terms will he sign a short-term deal. he is not going to accept anything other than something that raises the debt ceiling through 2012 and that is flat out a promise. he was unequivocal. beyond that, the question over the next few days is, how do they get to this negotiation and all eyes are on john boehner, speaker boehner is the man who has to explain to them where he can get the votes, what it would take for them to deliver. and they are really looking to him. all the negotiators, to explain what the deal would look like for them to get on board with that. >> let's look at the tough choices that they have to make. if you have a grand deal, you

have to have a number of things. maybe social security means if you're making money, you get fewer benefits, maybe raise the retirement benefits, change how you formulate the cost of living increases. one big question is they want the tax cuts to expire and republicans say no way. they are opening to closing loopholes, an increase in federal contributions, medicare patients could pay more, raise the eligibility age and nancy pelosi comes out and says, i want to help the president. i want to get a deal. but listen here, don't touch social security. and then we have the republicans that are adamant, no increase in rates on the table. how does the president broker this? everybody is in a good mood but they have their red lines. >> well, they will not self the raise in rates but there is the possibility. here's the theory. what they could do, john, is potentially agree to close

certain loopholes, say certain subsidies to corporations and in exchange the corporate tax rate is reduced. and so you can say those loopholes come out in the wash. that's one way to look at it. and then you could look over to nancy pelosi's side and say, maybe they could change the estate tax rules and give her something or her group something on that side. the bottom line is, it's a bit of a parlor guessing game at this point. there are a lot of moving pieces and we can't really know what exact deal is going to click into place. they have to figure that out over the next few days and then see if they can actually get the votes for it next week in the house of representatives. it's really a big unknown. >> a big unknown that becomes like a game of whack a mole. that collapses and another one comes up. as the president said, nothing is agreed to until everything is agreed to. jessica yellin, thanks. let's get a perspective from

fareed zakaria. i want you to listen, the president sounds pretty optimistic. >> everybody acknowledged that we have to get this done before the hard deadline of august 2nd to make sure that america does not default for the first time on its obligations. and everybody acknowledged that there is going to be pain involved politically on all sides but our biggest obligation is to make sure that we're doing right by the american people. >> do you really believe that polarized partisan washington is about to do right by the american people? >> the crucial sentence in what president obama said was all parties acknowledged there was pain -- going to be pain on all sides. if that's the case, if that's an accurate representation of what the republicans are now saying

and are now feeling, that's great news. pain is good. because what that means, we have a compromise possible. a compromise is only possible if both sides feel the pain. if there are concessions made on both sides and both sides feel that giving up something that they cherish dearly. if that's the case, this is a numbers game. this is easy. the democrats don't want to have big spending cuts. the republicans don't want to have big tax increases. and there's a lot of space -- there's about $2 trillion between those two statements and you can split the difference any number of ways. but the key is, are we at a stage where the republican party, in particular, has decided that they are willing to concede on the issue that they will have to be pain for them, which means tax increases, call them what you will, elimination of loopholes, deductions, however you describe t but you're going to have to have some kind of increase in revenues. >> and you also can't do it to get those big numbers without

going after medicare and social security. the president says he's willing to do so. the democratic leader and the senate, majority leader harry reid, wouldn't even give a comment to reporter because he's mad that the president had that on the table. former speaker said let's deal with that separately. who's willing to lead that conversation beyond the president? because if you look at research polling, 32% of americans say let's reduce the budget deficit but 60% say keep medicare and social security as they are. who will lead that? >> the math is inevitable. you have to cut that in order to make the long-term budget outlook of the united states feasible. before the country to be fiscally solvent. and let's be clear about this. he seems to be foresablging the opportunity to run a medicare campaign which always works, and whether it's 60%, 78% and

clearly nancy pelosi, harry reid are less forward looking on this issue and reading the polls more carefully. but if the president of the united states comes out there and says, yes, i'm willing to consider cuts and entitlements, it changes the dynamic and it will over time mean ultimately that the democratic party will make those concessions. >> but as we watch this play out, some have said, so what. the government will find ways to find money elsewhere. others have said doomsday. i want to read something that the council of foreign relations wrote on your blog this past week. if the fight over the debt ceiling turned the world's risk free benchmark into a risky asset, pabd moan yes, ma'am would enshoe investors would not know which way to turn. they might hide from all risk. do you believe it would be that

bad? >> i believe there is a significant possibility that this would be the most disruptive event. if suddenly that is cast into doubt, who knows what effect that has on euro bonds, on chinese growth rates and all kinds of things. you can imagine ripple effects that go well beyond any simple systematic calculation. do we really want to play with that? do we want to try and risk that scenario? it's possible but let's say there's a 15% possibility, that this poses an economic magnitude that plunges the world into a second global recession. is it really worth it? we've got to get this straight any way. we've got to sole this problem, our fiscal problems any way. is it really so hard to get it done? i think people who want to play

this game of chicken with the credibility of the united states, we have not in 222 years defaulted on our debt. we have an impeccable history. do we really want to risk it for some political game of chicken? stakes laid out by far read za car yeah. thanks. at the moment, the lead prosecutor in the casey anthony trial. he still says he can't believe that the woman that killed her 2-year-old daughter will be let out of jail in six days. >> if anybody could find a rational reason for why you put duct tape on a child that died by accident, then i'd love to hear it. and next in other headlines, the latest on a controversial execution scheduled for this hour in texas. the future of bus. in here, inventory can be taught to learn. ♪ machines have a voice. ♪ medical history follows you.

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welcome back. we're awaiting word from texas on this scheduled hour execution

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more now on today's top story. casey anthony will be a free woman. a florida judge sentenced her to three years in prison. but that's essentially for time served for lying about the 2008 death of her daughter. in a jury acquitted her. what was it like to be in there today? >> reporter: well, the most striking thing today was, of course, casey anthony herself. this was a totally different

woman we saw two days ago. she let her hair down. i mean that both literally and figuratively. she was much more animated, smiling, laughing, and engaged with her defense attorney. that was very different. and of course this time she's not fearing for her life as she was two days ago. now she's just worried about what the remaining of her sentence would be and i really thought she might get out of prison or jail today. that was not the case. but she's not going to have to wait long. as up point out, she's going to be released on july 13th, a mere six days from now. it's going to be next wednesday. john? >> any other legal threats she faces? >> very -- she has a number of them. first of all, the state is trying to get back some of the money, restitution, they say, for the prosecution and for the investigation. that's still to be worked out over the next 60 days. she has a civil suit coming from a woman who claims you defamed

me because you say that i was the woman that took your child. and equisearch, one of the groups that looked for caylee, they are saying that they want to get back $100,000 from a search that came from a daughter that she already knew was dead. she still faces trouble. >> the big lead s. we'll be on the streets next wednesday, martin savidge, thanks. >> yes. let's get unique insight into the sentence of casey anthony and the trial that captured the nation's attention. joining us is the prosecutor, jeff ashton. you still believe in your heart that she is a murderer. knowing that she will be on the streets in just a few days, what goes through your mind? >> well, i mean, we obviously didn't prosecute the case unless we believed in it, so we still do. at this point, the jury has spoken. they are the ones who have decided the case and we have to respect that. when she's on the street, i

simply hope that people will just leave her alone. >> do you view her at all as a threat to public safety, a risk? >> i would be concerned if she was a caretaker of children again. but, no. i think she's at greater risk from the public right now than vice versa. >> let's talk a bit about the case. some of the jurors coming out -- i want you to listen to jennifer. she told abc that one of the issues that was so difficult, some of them talked about being sick to their stomach a. hunch that they might have done it but couldn't vote guilty because it was a capital murder case. let's listen to jennifer ford. >> i think it was mentioned a few times that she charged her with other things, we probably could have convicted her but not for death, not for first degree. there's not enough to substantiate that. it's a very serious charge. >> any hindsight given that they are not lawyers, you should not have had a charge that involved

the death penalty? >> no, i don't. if the jury had accepted or seen the evidence as we did, then it was a legitimate case for the jury to decide. jurors in the guilt phase are instructed that they are not supposed to ask consider potential punishment in their decisions. so if that was a deciding factor, then they weren't following the instructions of the court. but you're right, they were given lesser included offenses. so their job was to look at the facts and decide on what the facts were proven beyond a reasonable doubt. so to say that they might have found her guilty of something less, then they should have. if that's in fact how they viewed the evidence. but, you know, everybody has their own view of the evidence and we respect the jurors' view but the evidence was what it was. >> not once in the last few days have you thought, given the emotions of this, given that i don't have a smoking gun i can't conclusively connect the dots? >> no, i don't.

that ultimately was the decision of mr. lamar but no, i do not think it was a mistake and it certainly should not have affected the jurors' verdict. >> you say it was the state's decision. did anyone bring up in those conversations, we're taking a risk here? >> the decision was his and the advice was his or not to discuss. and i have not been discussing those conversations with him because it really is privileged to keep. >> you think you had a solid case. many that watched every second of the trial think you had a solid case. but miss ford says in her view that you did not prove that it was not an accident. >> to prove that it was an accident, it gets to the conclusion that it had something to do with chloroform and duct tape for me because if it was chloroform, george said casey left the house with caylee. were they in a public place when

it happened? was caylee in the back seat chloroformed and duct tape or in public put her in the trunk? i don't know how to make that whole picture come together at all. >> other jurors have said similar things, that the accident scenario was at least as plausible as the scenario that you presented. again, in hindsight, anything you wish you could redo or is this just a compliment to the defense? >> no, i don't think there is anything that i could redo and quite honestly as i said from the beginning, if anybody could find a rational, reasonable explanation for why you put duct tape on a child that died by accident, then i'd love to hear it. we didn't hear it in court. but that was the juries' decision to make. with all due respect to them, i do think that was an issue that really hasn't been explained and never was. >> you're being quite the diplomatic and i'm going to say almost dissipation nate. i think that's a reflection of 30 years in the courtroom.

the jury is coming back short of 11 hours. you have to assume that you have a guilty verdict. i wanted to listen here to your opponent, jose baez. here's how he describes his reaction when he hears on those three felony counts not guilty. >> not guilty, not guilty, not guilty. what did you think? how did you feel? >> i felt a great sense of relief, i felt -- i was ecstatic for my client. really the happiest moment came after the first not guilty because i knew that i had saved her life and that was really my biggest fear and i -- once i got through that, i grabbed casey's hand and i held it. >> i've been in a lot of courtrooms, mr. ashton, and i was watching you and mouth the words wow, i think they were. take us back. >> well, that's pretty much -- you summed it up.

when the jury came back with those verdicts, i think we were all -- i think everybody was shocked and my expression was, wow. but you accept the juries' verdict, you move on, and that's kind of where we are right now. we felt like we presented every bit of evidence that there was about this case and about poor caylee's death. presented it in a way that we felt was fair and legitimate and the jury decided what they decided. >> we don't know what comes next for casey anthony. we do know that she will be free next wednesday. there is talk that she may write a book, tell her story. if she were to write a book, would you believe a word of it? >> no, i don't think i could. at this point, you know, it's like the boy who cried wolf. there's really no version that miss anthony could give unless it's one that accounts for all of the evidence, you know, but the versions that we know so

far, including the version expressed by her counsel in opening statement are not true. i do not believe them. i do not believe for a moment that george anthony had anything to do with disposing of his granddaughter's body and i believe his suicide note is destroying his that. >> would you like to hear her at least try to explain it? >> i would not read that book. i would not care to hear the explanation. because quite frankly, i would not be able to take it as anything about fiction at that point. >> jeff ashton, i thank you. this just in from texas. the mexican man has been executed for the 1994 rape and murder of a san antonio teenager. huberto was pronounced dead at 7:21 eastern time. the obama administration wanted

a reprieve because authorities did not allow him to contact the mexican consulate, a right by national treaty. then governor rick perry of texas denying that reprieve. the execution taking place 20 minutes ago in texas. we'll be right back. after college, i moved back in with my parents. i was worried about 'em, you know? i mean for instance my mom went to bed tonight before making my dinner. which is fine, i mean i, i know how to make dinner. it just starts to make you wonder. is this what happens when you age? my friends used to say i was the lucky one.

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here's an image that speaks volume about the public's debate about the casey anthony trial. right there a clear message to

the jurors that found casey anthony not guilty of killing or abusing her daughter. harvard law school professor don says the system worked. sunny hostin from trutv "in session" saw the information differently. you have heard the debate about this trial that continues. we just heard from the prosecutor and nancy grace says it's an injustice. and you say, a criminal trial is not about who is the better lawyer. it is about the evidence and the evidence in this case is a reasonable doubt in the mind of all of the jurors. the system worked. explain why this is so important in the court of law. >> by the way, i would have written the same essay if the jury convicted. there was enough evidence to convince and gaps in the evidence for a jury to acquit.

juries are not computers. 12 jurors on a different day might very well have convicted on this evidence. there are hundreds of people in jail on lesser evidence, some even on death row. there were gaps in the evidence. there was no cause of death. there was no time of death. it was overcharged. women who murder their children don't usually get the death penalty and it was foolish to seek in a case where they were unlikely to get one and more likely lose their credibility. the best thing that happened in this case is that the judge throwed the book at her for obstructing and lying. she succeeded in destroying the evidence. by not reporting to the police she presented the police from getting the evidence to conclusively prove whether she was guilty or innocent. so the proper crime was obstruction of justice. she should have gotten more time for that. but there was really no evidence beyond a reasonable doubt about premeditated first-degree murder that was so conclusive that you could really condemn the jury for having acquitted.

>> sunny hostin, you just heard from the lead prosecutor, that there was a discussion about whether to go forward with the capital murder charge. he wouldn't discuss that with me. you're a former prosecutor. given the emotions and what he just said, jurors are not computers or attorneys. they would know that they could have come back with manslaughter. they are not attorneys. should they have dropped that charge and put aside the better politics of the case to get a better verdict? >> these charges decisions are made by prosecutors all over the country every single day. and so i think i would be remiss to try and second guess the charging decision actually and i've spoken to jeff ashton and he believed that the evidence supported a first-degree premeditated murder count. i think that certainly there were gaps in the evidence but i agree with the professor, it's possible that another jury could have come to a different conclusion and so i agree, the system worked here. i think the prosecution believed

in its case. that's why they brought the case. prosecutors don't bring cases unless they believe the evidence doesn't support the case. this jury after listening to all of this testimony, over 400 piece of evidence came to a different conclusion, a conclusion that most people don't agree with but 12 people did agree with it and i think that the lesson that we take from this is that our system is one of the best systems in the world, if not the best system in the world and we should be pleased that 12 people listen to all of the evidence and came down with the verdict that they all agreed on. >> one of the controversies after the trial is the media discussion of a case in progress. you're both prominent attorneys and you're both on tv quite a bit. listen to a conversation that i had with nancy grace at the top of the hour. listen here. >> again, as an attorney, you agree that you're part of a system where p it's innocent until proven guilty. do you have any remorse, any sense thaw owe casey anthony an

apology? >> john, can i ask you, why would you ask me that? that's just so nonsensical. because clearly i think the evidence showed that tot mom, casey anthony, was guilty. and to suggest that somehow, because i am a former prosecutor, because i am a crime victim myself, because i have a tv show now, that somehow that suspends my freedom of speech and frankly my commonsense, that question in no way makes sense. tot mom, in my mind, has been proven guilty and as far as any apologies, i think it should be her apoll gee, apologizing to the public for spending about a million dollars of their money looking for a child that she says she already knew was dead. >> professor, to you first. everybody has a right to a free speech. but do lawyers us suspend obl gas to talk about progress when

they are on television? >> i think they do. nancy is a friend of mine. i like her. she's a terrific personality. but she's among a group of people, she cannot contemplate that a personundercut the presumption of innocence and she often rushes to judgment, often she's right, in a case like this, she was wrong. i do think that you have a bar certificate, you have a special obligation to tell the public over and over again about the function of a criminal trial, about the presumption of innocence, about the risks of the conviction of the innocent. remember, we live in a system that we say it's better for those guilty to go free than an innocent to be put away. we see signs, "we won't accept jurors coming in here," that's just awful. the public has an obligation to protect the life of this woman.

we may not like her, i don't like her, i think she's despicable, the way she covered up the death of her child, it's revolting. but we have an obligation to the law, and that obligation is paramount. and it applies to all of us as members of the bar and members of the public. >> need to end the conversation there, but this conversation will continue in the months and weeks ahead. thanks for your time tonight. still ahead, stop the presses, literally. a stunning the decision by the media mogul rupert murdoch. ♪ my only sunshine ♪ you makes me happy ♪ when skies are grey ♪ you'll never know, dear ♪ how much i love you ♪ please don't take my sunshine away ♪ [ male announcer ] as long as there are babies, they'll be chevy's to bring them home. ♪ took some crazy risks as a kid.

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a blossoming scandal involving the media mogul rupert murdoch took a stunning turn. the british subsidiary announced its flagship british tabloid, the news of the world, would be shut down after printing one final sunday edition. this rare murdoch surrender comes among revelations "the news of the world" tabloid hacked into cell phone conversations and voice mail accounts. cnn's richard quest is with us now from london with more on a media scandal that is also a huge political controversy in great britain. richard, first, help us understand the tabloid culture here. "news of the world," are they beyond the pale, are they that much more sleazy than the rest of the british tabloids, or did they just get caught? >> i think they were, to some extent, in a league of their own in terms of exclusives. and the truth of the matter is, whether it was stories about prince harry and his drug taking, david beckham and his affair or any of the other

stories, max mosely of the formula one sensation, whatever it was, their stories always managed to have a certain truth about them. so they had a certain disgusting credibility about it. they were very sure about what they went to press with. as, indeed, all the tabloids are. you can't, you dare not with the british library laws, or what used to be, go to press with a story you're not pretty certain are true or you've got a defense. so you end up with this paper that spews out some of the most vitriolic sewage every week, but frankly, more often than not, gets away with it. >> so the question is, what next? i want to talk more about the specific examples here that led us here. one of the questions is what next. listen here to james murdoch, he, of course, the is the ceo, the deputy chief operating officer of the parent company, news corp. he's responding to now the prime minister says there will be inquiries, there will be other

inquiries. mr. murray trying to make the case that it's not just him. >> these are industry-wide inquiries, and i think you will see both an industry-wide process with the police and these criminal investigations are industry-wide, and i think that's really a question for the industry, for other papers, for other people to really come to grips with. and it's really for them in terms of their practices and how they do it. >> is everybody to blame, or is he just trying to say everybody's to blame? >> oh, no, there's more than enough blame to go around here. these two inquiries, one of them is into the hacking, the other is in to payments to police. it's widely believed that most of the other tabloid newspapers, at some stage, have paid off the police for tips. and that, of course, is not unique in the uk. that's also alleged to happen in other countries. but also, this hacking scandal, it's widely believed other papers have dipped their toe into that nasty bit of business. what murdoch is doing is

justifying the reason for closing a paper of 160 odd years' age, putting more than 200 people out of work, and saying he's doing it all in the spirit of journalism. but tonight in britain, people are saying, well, a, you didn't need to do it. b, the only person that really needed to lose their job was the former editor, who is now the chief executive, and c, maybe this is something they wanted to do all along. the murdoch papers have been trying to streamline, cut costs. they want to take their newspaper, seven days a week, and this provided the perfect opportunity to do all of that in one fell swoop. >> you talked about allegations of drug use by the prince, you talked about david beckham, much of this dedicated, early on, anyway, to high political figures or what we would consider sports or cultural celebrities.

but how much did it matter, how much did it get into british public opinion when these hackings were also about dead soldiers and victims of terrorist bombings. her sister was killed in the london transit bombings. listen to her. >> it's disgusting to have anyone to have their privacy invaded in this way, but when it moves out of the realm of celebrity and into the realm of victims of crime, it's a different matter and really pretty sinister. >> did public opinion pivot because it involved everyday folks? >> to use a phrase you'll understand, this was the game changer. >> as you can see, it's a pretty hardy, pretty feisty tabloid cultural in great britain. this is "the sun," "the daily mirror" here. i'm not going to repeat some of these headlines. "harry pothead."